Contact: Amanda Kennedy
Deloitte
Media Relations
+61 [0] 418 806 477

Contact: Paul Masters
Deloitte
Tax Partner
02 9322 7851

While changes today are a welcomed by small business, they do not go far enough according to Deloitte Tax Partner, Paul Masters.

“Most notably, there is no change to the maximum net asset threshold which currently stands at $5 million,” Mr Masters said.

“This threshold precludes any small business that has net asset above $5 million, including entities connect with the entity and affiliates, from using the small business CGT provisions.

“Initially the May Budget indicated this would be increased to $6million, however it is missing from the Bill which is disappointing.

“Even an increase of $1 million would have been insufficient - the current $5million level has existed since September 1999.

“Small businesses rely on these rules to ensure they can retire with the concessions akin to those provided to employees that invest in superannuation.

“Many small business owners reinvest their annual profits back into their business and put little into superannuation.

“The small business CGT concession allows these business owners to sell their business and receive some concession on their capital return.

“The concessions allow business owners to reduce tax payable to between 0 per cent and 11.6 per cent.  

“In respect of the changes put forward in the Bill, all the changes are positive and in particular the replacement of the controlling 50 per cent test with a significant individual 20 per cent test is welcome.

“This will allow the persons having minority interests over 20 per cent to reap the benefits the concessions.”